What does 'ground rent' mean?

A ground rent refers to a scenario where an individual owns his house, but someone else owns the actual property (the “ground”). The homeowner pays the ground rent owner an annual fee, or a ground rent, as a rent on the land.

In Baltimore, this form of ownership dates back to the 18th century. The intent was to make homeownership affordable, by allowing purchasers to only have to buy the house, while paying an annual rent on the land.

Since many ground rent leases were established for 99 years, time and poor record-keeping made it difficult to know who owned the ground rent.

In response to this, since 2007 the Maryland State Department of Assessments and Taxation has maintained a ground rent registry to help homeowners determine who owns their ground rent.

Consequently, homeowners can now check for ground rent information and locate and determine their current ground rent owner by checking the Maryland State Department of Assessment and Taxation website.

When a property is listed, it is the listing agent’s responsibility to determine whether or not a listed property is subject to a ground rent (and, if so, how much). The property description on the MLS listing should note if the property is being conveyed in fee simple or as part of a ground rent.

Homeowners of properties subject to a ground rent that was created after April 8, 1884 have the right to purchase the ground rent, which would convert the property to a fee simple ownership. The purchase price is determined by a formula set by Maryland law that varies depending on the year of creation of the ground rent.

Further, if a property that is subject to a ground rent has not heard from the ground rent owner for at least three years, the homeowner can redeem the lease. For more information on this, please visit the Maryland SDAT website.

Leave a comment

You are commenting as guest.
  • Ways to save at closing

    Title charges are the largest chunk of closing costs and can vary by hundreds of dollars.

    Learn more

  • What are closing costs?

    The real estate closing process involves loan steps, legal steps and title steps.

    Learn more

  • What's title insurance?

    Insure your legal ownership just like you'd insure the building, but for lots cheaper.

    Learn more

Connect with us


Our blog contains general information only, not intended to be relied upon as, nor a substitute for, specific professional advice. Rate tables and figures that appear on our blog are deemed reliable but not guaranteed. For current rates & policies, refer to our Quick Quote and Consumer Guide. We accept no responsibility for loss occasioned to any purpose acting on or refraining from action as a result of any material on our blog.